Here we reprint a letter published in the Financial Times on April 25 by noted environmental economist Thomas Sterner. Link was added by CTC. Text and headline are unchanged.
Last week, representatives of more than 130 nations, including French President François Hollande, signed the climate pact in New York. The agreement is a success because it has widespread support but it contains little of substance on instruments.
Elinor Ostrom, the economist and Nobel laureate, insisted that the most difficult part of a negotiation is to get the participants to the table. Paris did that. Now every country must ratify, but that is still just the start. To end the fossil fuel era within a generation we need our very best instruments, and yes, that does mean a carbon tax. This is all the more urgent because of current low prices.
The fossil fuel industries are not going to give up voluntarily — they will fight back. The recent fall in oil prices from $140 to $30/bbl will provide impetus for increased consumption and emissions may soon rise again. The price fall is partly the result of expectations of stricter climate policies. Fossil producers have understood that, come 2030, business will not be good — so they have done everything in their power to maximise capacity and sell now.
The Saudis have realised that their old strategy of defending OPEC in order to control the oil market in the very long run will not work in the face of climate realities. This is an example of the “green paradox.” Expectations of future taxation lower current prices. The green paradox has already happened in a big way and cannot really happen again (fossil fuel prices cannot fall much more).
We, the consuming importers, would be stupid if we did not seize the opportunity to tax fossil fuels now. This is the best way of stimulating efficiency and renewables — it also gives money to the Treasury (instead of to the producers), and it helps keep the fossil rents low — making it easier to close mines and oilfields.
Professor of Environmental Economics
Gothenburg, Sweden and Collège de France, Paris
Neil Heesterman says
The Paris conference has shown that the present commitments will result in 3-5 degrees Celsius global warming by the end of the century and that 1.5 degrees is required to prevent sea levels to rise beyond the previous .5 -1m predictions. Over 190 countries have agreed to try to achieve that 1.5 degrees and in April 155 agreed to submit their plans within a year in order to ratify the agreement. The required reductions are enormous and this time the main media starts reporting some of it. The Word Bank, IMF, HSBC, Citibank, Standard & Poor, the Bank of England and Goldman Sachs are all warning that fossil fuel reserves will soon lose their value.
A global carbon tax is the simplest and most effective tool to fight climate change. the fossil fuel exports from all countries could be taxed and the revenue could be used to pay poorer countries cope with climate change and pay for much needed carbon capture and storage. Post 26 of my blog, “pipelines and carbon tax” shows under 14 headings with 47 hyperlinks to source documents how much can be achieved. You can reach it by clicking on http://www.neilwilhees.blogspot.ca
At present, power generation causes only 21% of the GHG emissions. While all land transportation can be made electric we still have to deal with the CO2 released from industrial processes, agriculture, ships and airplanes. That is why CO2 has to be captured from smokestacks and directly from the air. It does not have to be stored deep underground but can be converted to fuel, plastics, fertilizers and cement. Many projects are already underway. Carbon Engineering has a plant in Squamish BC Canada that captures the CO2 from the air and will soon be able to convert it to synthetic liquid hydrocarbons at an estimated cost of $1 per litre. The steel industry has one facility extracting 800,000 tons of CO2 per year from a direct reduction plant while another slightly smaller one for a blast furnace will soon be ready. Coal is an essential reduction agent to obtain metals from ore so that type of capture and recycling of CO2 will have to be encouraged as fast as possible by paying companies a fixed rate for every tonne of CO2 they capture. It is already done in Norway.
Ken Logan says
Climate Change is the fastest growing religion. Like all religion, one is required to simply believe where facts cannot support conclusions. As a small business person that operates 15 late model trucks let me assure you that taxing the exhaust emitted by these trucks will do nothing to reduce the amount of the exhaust. These 2016 model trucks run on diesel, I cannot change that. They get 40% better fuel economy than my 2012 trucks. They automatically shut themselves off after 5 minutes of idle. In my business $4.00 gallon fuel is all the motivation you need to reduce fuel consumption. There is absolutely nothing I can do to reduce emissions. A tax on the emissions would be nothing more than a money grab and would hurt our employees and customers. If you want to believe that my trucks are negatively affecting the climate, even though there are no facts that support your belief, I’m OK with that, but don’t ask me to send money to the church of climate change…I’m not a believer and should not be forced to donate.
Let’s take a modern example though I doubt civilisation is the right word for this this such as the Soviet In Tony Judt’s "Postwar: A History of Europe Since 1945" he explains that most westerners like to think that they won the Cold From an ideological point of view this might arguably be the In terms of realpolitik this is simply not Germany at the end of WWII was very thoroughly It’s military was a fraction of what it had been at the height of Nazi Germany’s infrastructure was in The industries were either largely or still in the process of being obliterated mostly by the Soviets It would have been impossible for Germany to continue to wage any kind of armed conflict for very much In 1991, The Soviet Union may have collapsed and it’s economy might have been on the verge of ruin but it still had a sizeable army of notable repute and it also maintained the second greatest nuclear arsenal on More importantly however, and this is the point that Judt hammers home, the former Soviet leaders were still largely in Yes, there were notable examples throughout the Easter bloc of tyrants such as Ceaucescu being summarily executed along with his wife, or the leaders of the communist party in Eastern Germany being deposed, but a lot of the former apparatchiks were still there and very rapidly taking over the elements of the economy through capitalistic means that they had previously controlled via Judt explains that this came as a result of the fact that there was no one else with the kind of bureaucratic or organisational expertise to fill this Hence while the creed may have changed most of the players were still sitting at the same To say that the and its Western Allies won the war extends only as far as to say that the Communist ideology had been proven And if you regard that as the primary criteria for who won that war then certainly there is some justification At the same time, you have to recognise that "communism" let alone socialism was never truly put to the test in the Soviet Union so in reality the West "defeated" a crony version of those political philosophies that would have shocked the shit out of Marx had he been The leaders still in power and the people going no where what we see is that the social structure in Russia remains very consistent with what came before and what came before Only now, in the aftermath of this apocalyptic struggle, are we seeing glimpses of what might be called hope with a more educated population which may one day develop into a viable Russia has seen moments like this in the past and hopefully this time they will Sorry that I went a bit too deep I didn’t read the "not to specific" until I was I hope this Otherwise still an interesting point to bring up next time you debate the Cold tl;dr The leaders of the Soviet Union are still largely in power, the social structure is more or less the same, Communism was never defeated since it was never really there to be The more shit changes the more it stays the